Two physician outsourcing firms reported gains in earnings this week as the sector benefits from healthcare reform with fewer uninsured patients and higher reimbursement.
Mednax, a Fort Lauderdale, Fla.-based company that offers pediatric, obstetric and anesthesiology services, cited new acquisitions, Medicaid parity payments, improving reimbursement from commercial payers and contract renewals for its 15% growth in net income. Its first-quarter revenue increased 12.7%.
The firm reported $63.7 million in income on revenue of $566.3 million for the quarter, compared with $55.4 million on revenue of $502.7 million for the same period last year.
About 9.6% of its revenue growth could be attributed to recently acquired practices, the company said Thursday. Mednax paid $72.8 million in cash to buy a pediatric group and two anesthesiology groups in the first quarter.
Another $14 million in revenue came from states whose Medicaid programs are now matching Medicare rates for primary-care and certain subspecialty services under a provision of the Patient Protection and Affordable Care Act. While the company saw a shift to more government payers, it did book a modest increase in reimbursement from its third-party insurers.
TeamHealth, which focuses on anesthesiology, emergency medicine and hospitalist services, similarly reported Wednesday that Medicaid parity, acquisitions and cost controls helped boost net income 30.8%. Revenue increased 11.4%, with acquisitions adding 7.2% of the growth.
The Knoxville, Tenn.-based company saw $23.8 million in earnings on revenue of $641.7 million in the first quarter, compared with $18.2 million on $575.9 million in revenue in the same quarter last year.
Like their hospital clients, both companies reported that winter storms and below-average temperatures contributed to weaker patient volume in the quarter.
Follow Beth Kutscher on Twitter: @MHbkutscher
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